Solactive and Franklin Templeton Collaborate to Launch Two Thematic ETFs Targeting Sustainable Companies Across Food and Healthcare
Solactive and Franklin Templeton are excited to announce their partnership in launching two new exchange-traded funds (ETFs) tracking Solactive indices. Designed to offer investors focused exposure to the dynamic food and healthcare sectors, these ETFs will use the Solactive Sustainable Food Index NTR (net total return) and the Solactive Sustainable Health and Wellness Index NTR. By leveraging Solactive’s indexing expertise and Franklin Templeton’s investment capabilities, these ETFs are poised to meet the evolving needs of investors seeking long-term growth and sustainability.
According to research from Statista, the health and wellness market size worldwide was at more than $4.37 trillion in 2020 and is set to grow to almost $7 trillion by 20251. The food market revenue reached $8.67 billion in 20222 and is forecast to grow annually at a rate of 6.73% until 20283. To tap into that potential while, at the same time, considering the importance of ESG factors in investment decision-making, the indices aim to capture the performance of companies at the forefront of driving innovation and sustainability within those sectors. Both indices use Solactive’s proprietary Natural Language Processing (NLP) Engine ARTIS®, which is utilizing advanced algorithms to parse high volumes of public documents evaluating companies’ exposure to the segments.
The Solactive Sustainable Food Index NTR tracks companies prioritizing sustainability and innovation in the food network across industries such as agricultural machinery, aquaculture, crop protection, packing solutions, smart farming, sustainable food, and water technology. Solactive has partnered with Institutional Shareholder Services (ISS) to identify companies that are aligned with the relevant UN Sustainable Development Goals (SDGs). Further environmental, social, and governance (ESG) criteria are then applied to ensure sustainability and responsible practices including checks on impacts to biodiversity-sensitive areas and gender diversity on boards.
Similarly, the Solactive Sustainable Health and Wellness Index NTR focuses on innovative healthcare companies, including eHealth, genomics, medical imaging, robotic surgery, and those specializing in senior diseases. It considers companies that facilitate healthcare access and meet diverse consumers focusing on an ageing population. Companies deemed by ISS to be contributing to SDG 3 (good health and well-being) are selected. Other ESG criteria are then applied to ensure a selection of companies promoting sustainable and impactful healthcare solutions.
The two ETFs, Franklin Future of Food UCITS ETF and Franklin Future of Health and Wellness UCITS ETF, will be listed on Xetra and LSE Stock Exchange on 6th and 7th July under the stock codes FOFD and FOHW, respectively.
Timo Pfeiffer, Chief Markets Officer at Solactive, commented: “We are pleased to continue our engagement with Franklin Templeton to launch these indices. Our food and healthcare indices enable investors to gain exposure to companies that are at the forefront of innovation and create a positive impact in these vital sectors, which have great potential to grow. Moreover, they align with ESG criteria, which is a current increasing demand to help build a better planet”.
Rafaelle Lennox, Head of UCITS ETF Product Strategy at Franklin Templeton, said: “We are delighted to have partnered with Solactive and ISS in the creation of these forward-looking solutions aligned to UN Sustainable Development Goals, providing investors with exposure to companies involved in innovative and sustainable practices across food and healthcare”.
1 Statista: Size of the wellness market worldwide in 2019 and 2020, with a forecast to 2025
2 Statista: Food Report – 2023